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Comment by kenjackson | Hacker News Reader

Ppl always repeat the profit of Apple, but why? What exactly is that relevant to, unless you're a shareholder or Apple employee? Is it just a comment to indicate that Apple isn't about to go out of business?

To each his own.

This is really the important statement. Phones are in a state now that I think we can actually have 3 viable OSes in the market. I know families where the dad has a BB, the mom an iPhone, and a child an Android (or Sidekick back in the day), and no one cares. It's not like PCs.

When I go and look at a WebOS device or WP7 I'm not worried about the fact that they have small market share. For the most part it doesn't matter that much to me as a consumer. Sure WP7 only has 20,000 apps. But unless you're Robert Scoble, you'll be more than happy (and if you're Robert Scoble, apps don't even count until you hit 500k).

It's a very different world, and I think we'll see things evolve quite differently.

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"Is it just a comment to indicate that Apple isn't about to go out of business?"

Partially, and partially to indicate that the way Apple is doing things must be at least somewhat right and sustainable.

Why is it so hard for Android manufacturers to release updates for their phones? Because they don't make enough on them to continue supporting them. They make money on new devices sales, so they keep churning out more new handsets.

partially to indicate that the way Apple is doing things must be at least somewhat right and sustainable.

Just an odd concern for an end user, IMO. When I go to buy a car I don't look at the profits of Honda vs Ford. Sure you may not want a company that will go bankrupt, but even if they did the impact really isn't all that huge.

Why is it so hard for Android manufacturers to release updates for their phones?

Because they make deeply integrated skins. They have to reintegrate the skin with a new drop from Google -- not on their schedule, but on Google's (that's when customers start screaming for the update).

Because they don't make enough on them to continue supporting them. They make money on new devices sales, so they keep churning out more new handsets.

Everyone makes money on new device sales. The difference is if you get an iOS device -- Apple gets the profit. HTC/Samsung/Moto/LG/etc have to compete for the next sale, even if you've already decided it will be Android.

Of course you don't think about Apple's share of profit when you're buying the iPhone, but when you're discussing the iPhone's long term future, the fact it makes an immense amount of profit is very much relevant.

To me, when discussing the long term future of an OS, a very valuable metric is how many companies are using it to build their hardware.

Apple is ridding the wave, releasing kick-ass products one after another; but you never know how tomorrow will look like for Apple. On the other hand, if Samsung stops making Android devices or goes out of business, there are others to fill in.

So it's not really so cut and dry.

"Just an odd concern for an end user, IMO."

About as odd as end users concerned about which OS has a more true multi-tasking implementation. Those who mention the profitability of iOS devices as a plus are probably about as numerous as those who mention multi-tasking.

"Everyone makes money on new device sales."

I think you misunderstood. I never said Android manufacturers aren't making money, I said they aren't making enough to support the device as long as people would like:

"Because they don't make enough on them to continue supporting them."

"Those who mention the profitability of iOS devices as a plus are probably about as numerous as those who mention multi-tasking."

These are both uncommon concerns, to be sure, but they're not both odd.

The difference is that the former has no direct effect on the user experience, at best it's an enabler for continued updates.

There might well be a use for the phone in which true multitasking is desired, if you need that use then wanting the feature is no more 'odd' than someone wanting a plumber's snake because they're a plumber.

Profitability has a direct impact on user experience, in that it fuels the third-party app ecosystem. A platform is only as good as its apps, and a company that is on the verge of bankruptcy is not likely to inspire confidence in developers.

The GP's car analogy falls apart here because when I buy a car, unless I'm an after-market modder, I don't plan to add more functionality to the car. Instead, I expect the car to continue to work as I bought it (aside from normal wear and tear of course), regardless of what other cars are on the highway. I expect my phone, on the other hand, to be able to run the latest and greatest apps and games, so when another platform keeps getting all the shiny apps, it impacts my user experience.

Yes, "true" multitasking might be a desired feature for some people, in which case it should be weighted accordingly. But it's not anymore odd to consider a company's profitability as a decision factor.

> I expect my phone, on the other hand, to be able to run the latest and greatest apps and games, so when another platform keeps getting all the shiny apps, it impacts my user experience.

The funny thing is, nobody had that expectation until the iPhone came along. Score one for Apple.

Profitability has a direct impact on user experience, in that it fuels the third-party app ecosystem.

Not true. Apple making a huge profit says nothing about your ability to make a profit. XBox wasn't profitable for a long time, yet game devs have made tons of money from it. In contrast the Wii was FAR more profitable out the gate, but the attach rate is much lower than the XBox360.

So XBox360 has a bigger ecosystem, better attach rate, higher quality games -- yet was less profitable than the Wii. How can that be? Because profit != ecosystem.

Again, a company's profitability says nothing about the phone or the app ecosystem. The ONLY thing it says is that Apple has huge margins which it has obtained through very good deals with the carriers. End users buying phones are paying about the same price for Android or iPhone devices. They all pretty much range from $50-$250 dollars on contract.

And while Android may not have the margins that the iPhone does, do you think anyone goes into a Verizon and thinks -- what if Google goes bankrupt?

When GM asked for bailout money, they cited a survey which said 87% of customers would not buy from a bankrupt company. IMO that qualifies as a huge impact.

If you read what I wrote, it's completely consistent with what you said, "Sure you may not want a company that will go bankrupt, but even if they did the impact really isn't all that huge."

I was saying that you probably wouldn't want to buy from a bankrupt company (psychological), which is the figure you cited. But I point out that even if you did the impact wouldn't be that huge. The impact you point out is to sales, not the actual consumer.

There are several reasons why this is the case:

1) Your warranty is almost certainly not owned by the company, but rather another company who will continue to fulfill it.

2) Service centers will continue to thrive. In fact sales are often loss leaders so that they can host authorized service centers.

3) AAA has almost all of the services provided by most car companies.

4) Parts for discontinued cars can still be made, and often/usually are.

Most people have virtually no contact with the corporation after they purchse their cars.

so yes, going bankrupt will have a huge impact on Ford's bottomline. But if you bought a Ford car today and tomorrow they went bankrupt, the impact on you, as the average consumer, will be close to zero.

>"Because they make deeply integrated skins" Not always true, and usually said skins are awful, slow, buggy crap.

I would argue that if skin development is introducing even the slightest delay into the release cycle, they should cut it out ASAP.

Because as a company profit is a very important goal if not the most important goal.

RIM collapsed this quarter but for keen market watchers its fate was clearly shown when its profit per unite slipped with no significant unit gain.

The same goes for Apple, when iPhone has to be sold at a discount but market share does not go up noticeably, Apple is in trouble. For now iPhone enjoys a better half of the entire industry profit while ARP goes up and defies seasonal fluctuation.

The 40% is relevant because it means Apple is taking most of the smartphone profits and it's just one manufacturer. I think with the long term trends we will see Android gradually replace the dumbphone market. Low end hardware, fragmented versions across carriers, and low margins of return as time progresses. Apple is aiming at the upper end of the market and I think they're succeeding pretty well if the profit share is anything to by.

It's an indicator that a developer can sell premium programs. If they can make good profit the ecosystem could follow.

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